Are accounting standards mandatory?
Companies legislation does not directly require compliance with accounting standards. However, the Companies Act 1985 requires accounts (other than those prepared by small or medium-sized companies) to state whether they have been prepared in accordance with applicable accounting standards and to give particulars of any material departure from those standards and the reasons for it. Directors of companies are required by the Act to prepare accounts that give a true and fair view of the state of affairs of the company and of its financial position at the end of the financial year. The accountancy profession (as represented in the Consultative Committee of Accountancy Bodies) is committed to promoting and supporting compliance with accounting standards by its members, whether as preparers or auditors of financial information. Under the Companies Act, both the Financial Reporting Review Panel and the Department of Trade and Industry have procedures for receiving and investigating complain
